Kumaran Banking Solutions

Executive Summary Banking business lines are many and varied. Retail Banking, Middle Market Banking, Corporate Banking, International Banking, Trading and investment Banking and various financial services form the main business lines of banks. The key driver in managing all the business lines are enhancing risk adjusted expected return. This is the common factor for all business lines. But management practices vary across business lines as profitability and risk factors associated differ in various business lines. Banks have to manage all risks that are associated with all the activities undertaken across the entire organization. From the risk management point of view banking business lines may be grouped broadly under the following major heads: The Banking Book

Advances, Deposits and Borrowings which usually arise from commercial and retail banking operations

The Trading portfolio

Assets those are marketable like fixed income securities, Equities, Foreign Exchange holdings, Commodities and Derivatives held for trading

Off-Balance Sheet Exposures

Contingent exposures like Guarantees, Committed or back-up credit lines, Letters of credit and Derivatives (swaps, futures, forward contracts, foreign exchange contracts, options)

Banking book is mainly exposed to liquidity risk, interest rate risk, default or credit risk and operational risks. Trading Book is mainly exposed to market risk, market liquidity risk, default or credit risk and operational risks. Off-balance sheet exposures may have liquidity risk, interest rate risk, market risk, default or credit risk and operational risks.

To comply with wide ranging regulatory demands, banks and financial institutions must understand, control and report risk across the enterprise. In continuation to the financial crisis which commenced in 2007 and accelerated in 2008, the ongoing global economic turbulence is threatening to become another major global recession. The turbulence mainly triggered by the sovereign debt crisis in many European countries followed by the unprecedented downgrading of the US sovereign long term credit rating by Standard and Poor saw a major blow in world stock exchanges. The sovereign credit crisis in the Euro zone has led to virtual insolvency of Greece, Ireland and Portugal. The crisis is now threatening Spain and Italy and is unlikely to stop there. Many Government and regulatory bodies across the world look for solutions to address lessons learned in order to create a more robust risk aware financial sector. This has resulted in changes in both the structure and requirements of regulatory supervision. Basel Committee of Banking Supervisors (BCBS) is revising the Basel II framework and introduced Basel III to increase risk focus. Increased standards for Governance and risk management are expected. Kumaran Systems offers proven Banking solutions as software, services, advisory and content. Using Kumaran Banking Solutions, Banks and Financial institutions can calculate the optimal risk and reward trade-offs to maximize shareholder value and comply with industry best practices and regulatory requirements. Kumaran Systems offers a suite of solutions for market, credit and operational risk as well as collateral and capital management across the trading and banking books.

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Credit Origination

System Credit DecisionSystem

Credit Transaction

System

Credit Monitoring

System

Collateral Management

System

Loan Loss Management

Risk Control Management

Risk Reporting System

Risk MIS System

SWIFT Implementation

Structured Products

Financial Analyzer

Credit Risk Data Capture System

Credit Risk Data Analyzer

SME Credit Risk Rating Solution

Corporate Credit Risk Rating

Solution

Credit Scoring (Obligor Default Rating) Solution

Credit Counselor

Compliance & Risk

Management Solutions

Credit Risk

Market Risk

Op Risk

Kumaran Banking Solutions

Credit Risk Management

BASEL II

SOA

Consulting Services

Business Process Management

Retail Credit Data Warehousing

Wholesale Credit Data Warehousing

BASEL II Reporting Solution

Datawarehouse & Business Intelligence

Kumaran Systems | ©2010-2013. All rights reserved

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Other IT Services offered to Banks

In addition to the Banking specific domain offerings, Kumaran has the following IT expertise, which has been utilized for some of the leading banks and other financial institutions in North America.

Application Development

Application Re-engineering

Modernization

Migration Solutions

Technology Architecting / Consulting

Data warehousing, Business Intelligence and Reporting Services

Independent Testing Services

Framework based Automation Testing

Application Maintenance Solutions & Production Support (24x7)

Outsourced Product Development - Global delivery Model

Domain Consulting

Applications Consolidation

Post Merger Integration

Resource Augmentation

Kumaran Systems | ©2010-2013. All rights reserved

Why Kumaran?

CMMI ML3 certified niche player in the software development arena offering unprecedented flexibility with Quality and Predictable Results

7+ Years of proven track record with a Tier-I Canadian Bank with 100% Success Rate. Helped technology division of the bank in achieving a perfect score of 10/10 on Project Satisfaction Index

Increased cost savings for the customer. For example 5 million CAD was saved in a single year 2008 for Bank’s CIRM division alone

Stringent quality assurance processes. Multiple instances where the application has crossed the UAT life cycle with zero defect

Decreased time to market by quick and optimal ramping up of skilled resources

Fixed cost project execution enabling clients to plan and budget costs effectively

Flexible Engagement Models – Ranging from global onsite-offshore model to onsite resource augmentation

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Technological Benefits

We assure you these technological benefits that allow you to surge ahead of competition:

Quick Delivery - With the domain expertise that Kumaran has, we have delivered regulatory applications to our clientele in less than five weeks. The use of re-usable code components has resulted in a significant 20% decrease in development time.

Assured Cost Saves - On an average, any of Kumaran’s client banks saves around 40% of costs for each application developed and maintained by us. We also assure you of revenue recognition based on project milestone activity. We provide you fixed cost projects; that enables you to manage your budgets more efficiently.

Stringent Service Level Agreements - Kumaran ensures that any project starts with stringent Service Level Agreements (SLAs) to ensure the quality of our services.

Domain Knowledge Repository - Kumaran’s rich domain knowledge repository eliminates the risks associated with excess dependency on new resources.

Improved Productivity - We assure you increased productivity by helping the end users in decreasing the applications processing time by more than 50%. This gives a significant boost to end-users’ confidence.

On-Demand Resources - We can furnish your establishment with well-trained staff who possess sound domain knowledge.

30-Day Warranty Support - We assure you of a 30-day warranty support once the application goes live in production.

Business Benefits

As your strategic business partner, Kumaran delivers these assured business benefits: Improved performance management

Strategic value creation by improved selection of clients

Pricing of products according to risk profile

Maximized returns though optimized allocation of economic capital

Greater levels of compliance and protection against loss of reputation

Elimination of unwanted exposures

Accurate estimation of loan losses; loss reduction owing to study of correlations

Better investment opportunities and scenario analyses that help with more accurate decision-making

Kumaran Systems | ©2010-2013. All rights reserved

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Kumaran’s Expertise in Large & Complex Engagements

Kumaran has been engaged as a Technology partner by Banking clients in Canada and around the world. Basel II is a significant program involving virtually all areas of risk management, although the changes are primarily focused on credit and operational risk, requiring careful management and use of data reflecting these risks. Following are some of the large and complex engagements carried out by Kumaran in banking space:

Application Development & Technology Transformation SME Credit Risk Rating Solution - Credit

origination, risk rating assessment (PD & LGD), credit monitoring and impaired loans management of Retail SME customers.

Wholesale Credit Risk Rating Solution - Credit origination, risk rating assessment (PD & LGD), credit monitoring of Corporate, Sovereigns and Bank customers.

Impaired Loans Management Solution - Loan loss management and computation of write offs, allowances and time value money provision of non-performing and high risk corporate customers.

Data Integration Solution - Better data integration through a core ETL process from feeds of 14 lines of business like Mortgage loans, credit cards, staff loans, student loans etc.,

Application Consolidation - Consolidation of four different legacy systems to one single web Application; Migrate applications in client/server architectures (FoxPro, Clipper, MS Access, R & R) to Web based 3-tier distributed architecture

Kumaran Systems | ©2010-2013. All rights reserved

“We have done it once again "Success” …This release is a great achievement “

Senior Director, CIRM Technology – Apr 26, 2008

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Kumaran Systems | ©2010-2013. All rights reserved

Data-warehouse & Business Intelligence AIRB Wholesale Portfolio Data-

warehouse - DWH solution leading to build flexible and web based wholesale credit reporting

AIRB Retail Portfolio Data-warehouse - DWH solution leading to build flexible and web based Retail credit reporting

Generation of management and supervisory reports using Hyperion SQR Production Reporting, Actuate e-report designer and Cognos

Testing Services

Manual testing of applications Automation testing using Quick Test Pro Performance testing using Load Runner Localization Testing

Outsourced Production Support

24/7 support Maintenance

“The release is a major milestone, not only it has expanded the application functionality, but also adding the operational flexibility. and more ... the BCAR reporting has been fine tuned to its best quality!…………..”

Director, CIRM Technology – Oct 5, 2009

“Congratulations and thank you for an excellent UAT experience – the best ever”

AGM, Risk Services, Risk Management – Jan 30, 2009

“Congratulations on a job well done. ……we started the year with over 700+ issues and today we are down to "zero" this is fantastic…………”

Senior Director, CIRM Technology – Aug 8, 2009

“We would however like to highlight one particular project which is a great example of striving for excellence in everything we do. In a post-implementation business partner survey, the project team achieved a perfect score (10/10) for delivering results that met expectations.”

“In the three years that project satisfaction surveys have been conducted, this is the first time a project team has received a perfect score from the sponsor. Congratulations to everyone involved”

EVP, Technology Solutions & EVP, Technology Infrastructure (Quarterly Message – Dated Feb 28, 2008)

About Kumaran Systems

We are a rapidly growing NASSCOM 2009-listed IT-enabling Company, with footprint in four countries. For two decades now, we have provided our global clientele with a range of high-end IT services, panning the realms of application development, software testing, application maintenance, and production support. Our functions have been structured into domain-specific strategic business units, optimizing our efficacy, and establishing us as the GenNext internet consulting leader. Equipped with multiple development centers, Kumaran Systems can be that one-stop-shop for every IT solution that your business demands.

Kumaran has been ranked among the Top 500 global software companies (16th Annual Ranking by Software Magazine) and also among the Top 200 Indian software companies (3rd Annual Ranking by Dataquest).

Kumaran Systems | ©2010-2013. All rights reserved

Kumaran Systems Pvt, Ltd TIDEL Park, 5th Floor, A Block, North Wing No.4, Canal Bank Road Chennai, India - 600 113 Ph: (91) 44 4227 3100 Fax: (91) 44 2254 0179

Kumaran Systems Inc. 701 Evans Avenue, Suite 509, Toronto, Ontario, Canada M9C 1A3 Ph: (416) 626 1332 Toll free 1-800-kumaran Fax: (416) 626 1756

Kumaran Systems Inc. No. 2275, Research Boulevard Suite 500, Rockville Maryland – 20850, USA Ph: (301) 984 4445 Toll free: 1-800-kumaran Fax: (301) 984 4446

Headquarters

Canada

USA

E-mail: banking@kumaran.com Website: www.kumaran.com